It’s abundantly clear that the US government doesn’t favor airline mergers in any way. That has become apparent from the current merger it opposes and will again come into focus as Alaska Airlines attempts to complete its acquisition of Hawaiian Airlines over the next year.
“Airline industry competitiveness is in free fall, and consumers are feeling the consequences. Today, the four largest airlines—American, Southwest, Delta, and United—control 80% of the domestic market, more than at any point in the modern history of commercial aviation.”
“The proposed JetBlue-Spirit merger is just the latest threat to consumers in this long string of mergers.”
United States Senator, Elizabeth Warren
The government remains adamant about preventing such moves that it considers anti-consumer to proceed, which is exemplified in the current attempt of JetBlue to merge with Spirit Airlines.
While earlier small airline mergers, like the Alaska/Hawaiian one, may not have garnered trouble from the US regulatory agencies, rapidly escalating negative sentiment towards airline mergers will be tested to the (737) MAX (excuse the pun) with Hawaiian/Alaska.
The two Hawaii-centric airlines believe and have stated unequivocally that their deal isn’t anti-consumer and that the two have only a very small number of overlapping routes. That may not matter to the case that regulators will present.
The sentiment of the US government is that airline mergers aren’t in the public’s interest, and it is the job of the Department of Justice to intervene. The US DOT thinks it too may have a say in whether or not this goes through. This change followed airline mergers that allowed American to acquire US Airways in 2013, United to acquire Continental in 2010, and Delta to acquire Northwest in 2008.
Ruling awaited in merger that would precede Hawaiian/Alaska.
A ruling is currently pending in the JetBlue/Spirit Airlines tie-up. If that is allowed to go through, as many analysts are predicting, it appears that the Alaska and Hawaiian marriage will be a shoo-in. If not, however, the deal could encounter insurmountable headwinds.
Hawaiian Airlines without the Alaska acquisition.
It isn’t clear whether Hawaiian Airlines can stand alone any longer. The small Hawaii bellwether continues to suffer from the Hawaii travel decline that followed Covid, and especially the prolonged failure of international travel to return to normal.
Then, in 2023, the airline faced the brunt of the impact following the Lahaina fire. Add to that the endless Airbus A321neo engine problems and repairs that are still not over, and ongoing technology/infrastructure issues. It’s been suggested that in addition to extreme debt, the airline may lose an additional $300 million in 2024.
Are you in favor of the Hawaiian merger with Alaska? How do you think this will turn out?